It’s New Year’s Eve Eddie, which is exactly the same as regular Eddie.
Last week (sort of) we were introduced to the three distinct personalities within a small business owner: the Technician, Manager, and Entrepreneur. This was based on Michael Gerber’s immensely popular book The E-Myth Revisited. I espoused the sentiment that once the Technician and Manager roles have been sufficiently cultivated, one should grow and develop the Entrepreneur, which is difficult given the paucity of useful references and the glut of vacuous PF blogs.
The Entrepreneur is arguably the most important element of the triad, as it is the one that can bring the most value and scale to your life and finances. The activities and tasks that the Technician and Manager perform are functions of the vision, strategy, and plans of the Entrepreneur. If the Entrepreneur is only focused on RRSPs and maximizing the value of a DB pension, then the other two can only match that scale and vision; it’s similar to garbage in-garbage out. The Entrepreneur is the leader; the Technician and Manager are the led. The Technician and Manager will rise to the level of the Entrepreneur, not vice-versa, so it behooves one to quickly gain the technical knowledge of the Technician and hone the systems of the Manager to begin the process of developing the Entrepreneur.
The following are my nascent thoughts on nurtured the Entrepreneur within the E-Myth paradigm:
Pay for good advice and services – the Entrepreneur recognizes that value is the key to a transaction of relationship, not cost. Paying a premium for insightful advice, quality products, and superior services enhances value and is disproportionately beneficial over time. There’s a colloquialism that mirrors this ideal: if you think hiring a professional is expensive, wait until you hire an amateur!
Outsourcing is your friend – related to the first bullet, kill the ‘do it yourself’ mentality as quickly as possible. Your core competency should be your entrepreneurial spirit and energy, not the supporting functions that can be outsourced to competent professionals who can do a much better job at their field of expertise than you. The most glaring examples are accounting, tax preparation, and legal functions. Delegating these tasks will liberate your mind from the Technician and Manager and will guide your thoughts towards your unique situation and developing your strategy. Do It Yourself is for bean counting neophytes
Depth of knowledge – notwithstanding the two points above, you still need to speak with your advisors in an intelligent manner. While you do not require a CA, a basic knowledge of accounting principles is required to converse and lever the full value of the professional relationship. Outside of your core strengths and pillars of your business, know enough to interact competently with your advisors. Focus on your strengths rather than your weaknesses
Skills and values – seek complementary minds with similar values rather than similar minds with conflicting values. Assemble your business partners and sounding boards with individuals who have expertise outside of your core capabilities. However, your business partners must share your values or your venture will likely experience severe issues
Apart from the E-Myth: Revisited, the following books, topics, and resources will help you develop your mind into that of the Entrepreneur:
Rolf Dobelli – The Art of Thinking Clearly: a brilliant book about logical fallacies and errors in thought. It is presented over 99 3-page chapters. It’s highly entertaining and germane.
Tim Ferriss – The 4-Hour Work Week: a devotee to minimalism and outsourcing, Ferriss espouses creating easy to manage ventures to enjoy the human experience throughout one’s working years, not just in retirement. It contains many interesting thoughts and tips.
Clayton Christensen – How Will You Measure Your Life?: a great book by an astute business mind and moral pillar.
Nassim Nicholas Taleb – The Black Swan: explores epistemic arrogance, probability and risk, cognitive errors, and much more. A definite must for anybody claiming to be an investor.
Robert Kiyosaki – Rich Dad, Poor Dad: although more to the personal finance aspect of things, I would be remiss if I did not mention it.
Richard Koch – The 80/20 Principle: quite simply the best indictment against clipping coupons and most things PF related.
Topics and resources
- Business valuation of finance courses, with the view owning your own business
- Theoretical economics
- Strategy – business, political, and military
- Biographies about famous businesspeople or leaders
- First-hand accounts of those who have experienced and persevered through extreme misfortune ie. Holocaust survivors. Man’s Search for Meaning was an incredible product of humanity.
Consequently, unless you have little knowledge within the Technician or Manager spheres, the following types of books will kill your entrepreneur:
- How to get out of debt
- Coach potato or index investing
- Anything for Dummies (ed. note: except this blog. HEYO!)
- PF blogs that focus on MERs, what’s in your wallet, rewards programs, credit cards, emergency funds, how to get out of debt, the personal finance updates and goals etc.
I welcome any criticism or feedback.